Tough on crime, tough on the budget

Given the soaring costs of incarceration, it is peculiar that economics doesn’t feature prominently in the law and order debate.

It costs an average of $205.94 a day, or $75,168 a year, to keep an offender in a NSW jail. So as the state’s prison population soars – in the past decade the number of inmates held in full-time custody in NSW has increased by 47 per cent to 10,068 – the burden on the government’s coffers has also grown to the point where the NSW Department of Corrective Services spent $1.09 billion in the 2008-09 financial year, including the costs of building new jails.

According to the Australian Bureau of Statistics, 29,317 people were being held in full-time custody in Australia in mid-2009, a figure 35 per cent higher than a decade earlier. Nationally, the net operating expenditure and capital costs of prisons is $2.8 billion, stated a report this year by the Productivity Commission. Five years ago, it was $1.8 billion.

Despite the substantial spend, research about whether locking people up helps to reduce crime is thin on the ground. Nor has a significant evaluation been conducted on whether alternatives to prison are more effective at rehabilitating offenders, although many people think they are. “The question the public needs to have answered is what is the return on that investment? What are we getting back?" says Don Weatherburn, director of the NSW Bureau of Crime Statistics and Research.

“We do not know whether the imposition of tougher penalties exerts a general deterrent or not. We have very little objective information on which types of Australian correctional program are effective in reducing reoffending and which are not," says Weatherburn. “We have very little information on what contribution, if any, rising imprisonment rates have made to the fall in Australian crime. The lack of information on these issues is a serious impediment to the development of effective policy."

Nevertheless, many state political leaders maintain a penchant for stirring up community fears about crime and announcing tougher law and order policies – longer sentences, more police – as “solutions" to make their constituents feel safer.

Yet the steep rise in the number of prisoners across the country is not due to increasing crime rates. In the past decade, all property crime, including robbery, has fallen nationally by 47 per cent, while assault levels have remained stable, says Weatherburn. Rather, rising imprisonment rates are largely a product of government policies including tougher bail laws and the introduction of standard non-parole periods. Courts are also sentencing more convicted persons to jail terms.

“In the politics of law and order, no would-be government wants to be outflanked in terms of being tough on crime," he says. “Right around the country, politicians are grappling with the fact that regardless of whether crime is going down – and it is in most states – the public think it is going up and the justice system is failing to adequately deal with it."

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But legal experts are becoming more vocal about questioning the soaring cost. Chief Judge of the NSW District Court, Reg Blanch, who oversees many of the state’s most serious criminal trials, asked in a speech in June why NSW needed to spend a billion dollars on prisons, “and could we achieve the same ends at a lesser cost?"

A quarter of NSW’s prisoners have not yet been convicted but are a product of tighter bail laws. This is also a national phenomenon: in the past decade, the proportion of the Australian prison population on remand has risen from 13 per cent to 22 per cent. Changes in sentencing laws have also resulted in offenders being held in jail for longer.

Blanch says many offenders had “extreme difficulty" reintegrating into society. “Jail sentences must be imposed in many cases and, in some, the sentence should be substantial, but the real question is how much is enough? The question how much is enough assumes real significance in the context of a prison budget of more than a billion dollars a year."

David Brown, law professor at the University of NSW and a member of the Crime and Justice Reform Committee, says many politicians have not taken economic arguments against increasing the rates of incarceration seriously. “There is some effect of higher imprisonment rates in reducing crime rates, but it is much less than people imagine," says Brown. “The best estimate from the leading study is that if you increase the imprisonment rate by 10 per cent, you decrease the crime rate by between 2 per cent and 4 per cent." The decrease is largely due to “incapacitation" – when someone is behind bars, they can’t rob you.

But Brown and Weatherburn both say the theory of diminishing marginal returns applies to the number of people in jail. “Imprisoning serious or prolific offenders prevents a lot of crime, but the wider we cast the net of imprisonment, the less cost-effective prison becomes," Weatherburn says. Brown adds that the criminogenic effects of being in prison must also be considered. “Being in prison makes people more likely to commit subsequent crime," he says. “Once imprisonment rates get to a certain point, there is a kind of tipping point – then, having large numbers from a community in prison weakens civic bonds, social capital and resources."

Some politicians are alive to the likelihood that less punitive law and order policies will alleviate state budgetary burdens. “The prison system is costing us a fortune," says
Greg Smith
, shadow attorney-general in the NSW Liberal opposition. “We are not getting the results we should be getting for our money."

Smith is a former deputy director of public prosecutions and says in NSW, about 85 per cent of prisoners receive sentences of between six and 18 months – and it is at this level a lot more could be done to consider alternatives to incarceration in order to reduce high rates of reoffending.

He points to lower incarceration rates in Victoria and its lower rate of recidivism – 36 per cent compared with 43 per cent in NSW – as illustrative of that state’s more effective rehabilitation programs. “Rehabilitation is a lot more effective for those that do not go into custody," says Smith.

The NSW Bureau of Crime Statistics and Research says reducing the rate of reimprison-ment by 10 per cent would reduce the prison population by more than 800 people and save NSW $28 million a year.

Despite experts from other states pointing to Victoria as an example of a more enlightened approach to criminal justice, in the run-up to the state election next month, both sides of politics have increased their rhetoric on law and order.

In stark contrast to the approach advocated by Smith, the Liberal opposition in Victoria has released a swathe of policies including ending home detention and suspended sentences, and tightening bail laws, which may increase prison numbers. The Victorian government responded by toughening sentencing laws.

Victorian shadow attorney-general
Robert Clark
says, “Law and order is a serious problem in Victoria. Victorians are very concerned about the state of sentencing and rising levels of violent crime, particularly street crime . . . We are [providing] for additional prison places as part of our corrections policy."

But Philip Lynch, director of the Human Rights Law Resource Centre in Melbourne, says many new policies are populist, not evidence-based, and are not likely to reduce crime or recidivism. “It is precisely the opposite of these policies which has resulted in good outcomes in Victoria," he says.

Lynch says many non-custodial alternative sanctions advocated by Victorian Attorney-General Rob Hulls “take a much more holistic and integrated approach to justice and dealing with the underlying causes of crime and disadvantage, and have been demonstrated to be much more effective".

David Brown says, “It is a pity the [Victorian] opposition have changed tack because Victoria is the Australian model which other states should be looking to. There is an understanding that people need assistance to desist from crime and resettle when they come out of jail – it is not going to happen by magic."

But other states are also preparing for larger numbers in jail. Queensland Premier Anna Bligh this week announced her state would introduce standard non-parole periods based on NSW’s.

In Western Australia, meanwhile, the daily average adult prison population has increased by 52 per cent since 2000 – more than twice the rate of growth of the state’s overall population. A thousand extra prisoners were locked up last year, and the WA government pumped $601.3 million into prisons in the year to June 30, up 12 per cent from the previous period and 28 per cent higher than the year before that.

Weatherburn says when a state has a rising crime rate, there is little choice but to invest more money in prisons. But because crime rates in many states are stable or falling, more state treasuries will be looking for ways to save money. He says, “They have got budgetary pressures on lots of fronts, but here is one where there is some flexibility."